Liz Truss has risen from the dead. She was buried quickly and without honors after suffering the opprobrium of being the shortest-serving Prime Minister in UK history (49 days). In British politics, it is not unusual for a resigned head of government to remain on her seat in the House of Commons, as she has. Life goes on and the temptation to try to defend her legacy, however small, is very strong. That’s why Truss published a 4,000-word article on February 5 in The Sunday Telegraph with the intention of communicating to the right wing of the Tories that he will continue to defend the same ideas that caused his removal from power.
In other words, it is available if a new party leader has to be chosen if the next election brings the Tories into opposition. That is the point of his optimism.
He tanked the British economy with an ideological cocktail of cutting taxes in the hope that it would magically trigger higher growth. It is a thesis that the Popular Party in Spain has shared in this legislature, although in recent times there has been an attempt to adapt that dogma to economic circumstances. If that’s possible. Dogmas are usually not very malleable. Even so, there is no doubt that it will be one of the axes of his program in the November elections.
“I was shot down by the leftist economic establishment” was the title of the article. It is always easier to present yourself as a victim and invoke a sinister conspiracy as the cause of the problems. Or blame society or political polarization, as Albert Rivera did after voters abandoned him en masse. In the case of Truss, the reference to that power leftist It is somewhat comical when it was Conservative MPs who forced her out for having pushed the country to the brink of a financial cliff.
It is not an inadvertent error. Truss truly believes that his own party has been tainted by “statist” ideas, because he no longer believes that lowering taxes will overcome all obstacles. He thought that she would be the new Margaret Thatcher, and for this reason he even copied elements of her wardrobe, without realizing that the world has changed somewhat since the eighties.
The best answer was given by a fellow party member. “You were brought down because in a matter of weeks you lost the trust of the financial markets, the electorate and your own MPs,” wrote Gavin Barwell, a member of the House of Lords who was Theresa May’s chief of staff. “During a deep crisis caused by the rising cost of living, you thought the priority was to cut taxes on the country’s richest.”
It is not surprising that Truss ended up becoming a meme.
police have warned the suspect is detached from reality and should not be approached pic.twitter.com/A6gDmTKmca
—etymologic (@etymologic) February 4, 2023
The country is suffering from a structural crisis that stems from several simultaneous factors: Brexit, loss of productivity, the effects of almost a decade of austerity that has crippled public services, the fall in real wages, the public health crisis…
In December, 500 patients died every week because of delays in emergencies, according to the association of doctors of that specialty. The ambulances took an hour and a half to treat cases of heart attacks or strokes.
Liz Truss believes that all this would be solved by lowering taxes. Other conservative leaders believe that the key is to reduce immigration, although it has been known for years that public health cannot survive without foreign-born medical personnel. It is a party adept at discovering fictitious solutions to real problems.
Right now he is paying a very high price in the polls for the failure of Truss, to which must be added the consequences of Boris Johnson’s years in government. In the latest YouGov poll, Labor is 24 points ahead to the conservatives.
In Spain, the Popular Party is also convinced that everything will be solved by lowering taxes. The opposite is not necessarily true, but at least it is not part of a dogma that is imposed regardless of what reality says. Resolve income differences between regions? Lower taxes. Increase the level of employment? Lower taxes. Fund public health and education? Lower taxes.
Juan Bravo, who happens to be the economic brain of Alberto Núñez Feijóo, said very convinced in July that it is possible reduce “bureaucratic political spending”, a populist promise with which to make people believe that with fewer ministries the entire Administration would apply the lesson and reduce its spending brutally. It is an unrealistic aspiration. That did not happen when Mariano Rajoy reduced his government to thirteen ministries.
In October, Elías Bendodo said that reducing taxes can increase collection, the famous prognosis of the Laffer curve that has never come true. He did not do it in the United States in the governments of Ronald Reagan and George Bush. “In the PP we have always said that lowering taxes is in our DNA, and this is not an ideology that can be adjusted to some circumstances or others, but rather it is a way of understanding the basis of growth”, he said.
They sell it almost as a mathematical formula, when in the end it is only an expression of their ideology, their DNA.
The PP puts all its faith in a report from the CEOE ‘think tank’ that came out with the astronomical figure of 60,000 million euros such as the savings that could be obtained from cutting the now mythical “unproductive political spending.” Logically, for employers, public spending is not only inefficient, but also an unfair competitor.
Maybe it’s because of the chaos caused by Liz Truss, but the PP has started to pick up the reel. At the end of January, Juan Bravo, who could no longer say that we are headed for a severe recession as Feijóo said in the summer, did not want to promise a tax reduction if they win the elections: “I would like to say that we are going to lower taxes, but we have to see what we find”.
Liz Truss’s idea that financial markets are part of a leftist conspiracy is not the only one that is out of touch with reality. In her efforts to argue that the British economy’s productivity and growth problems are due to taxation, she ignores the data. The percentage of tax revenues over GDP of the United Kingdom is at 35.8%, according to IMF figures. That of Spain is 42.1%, increasing above all thanks to the decline in the underground economy.
Although the promise is qualified now, it is certain that the PP will insist on the need to lower taxes, regardless of their impact on public services and public debt. “We have a mantra. Low taxes generate activity and that improves collection ”, his spokesman, Borja Sémper, said this week. Another Laffer napkin addict.
Liz Truss is not alone. In the PP she would have received better treatment than in the British Conservatives. Perhaps even she would have lasted longer at the head of the party.
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